Site-specific mutagenesis was used to introduce amino acid substitutions at the asparagine codons of four conserved N-linked glycosylation sites within the gp120 envelope protein of human immunodeficiency virus (HIV). One of these alterations resulted in the production of noninfectious virus particles. The amino acid substitution did not interfere with the synthesis, processing or stability of the env gene polypeptides gp120 and gp41 or the binding of gp120 to its cellular receptor, the CD4 molecule. Vaccinia virus recombinants containing wild-type or mutant HIV env genes readily induced syncytia in CD4 positive HeLa cells. These findings indicate that alterations affecting the second conserved domain of the HIV gp120 interfere with an essential early step in the virus replication cycle other than binding to the CD4 receptor. A 16 kilodalton protein expressed in HIV-1 producing cells was identified as the gene product of the "U" open reading frame (ORF). When expressed in vitro, this 81 amino infected individuals, indicating that vpu is expressed in vivo as well. Introduction of a frame-shift mutation int the vpu ORF did not significantly interfere with the synthesis of the major viral proteins in a transient expression system. However, a five to ten-fold reduction in progeny virions was observed after infection of T-lymphocytes wit the mutant virus. These data suggest that the vpu protein is required for efficient virus replication and may have a role in assembly or maturation of progeny virions.